The Prime Minister has warned the world’s leading economies that signs of economic recovery did not mean financial stimulus packages should be abandoned.
Speaking to a meeting of G20 finance ministers ahead of the G20 Summit later this month, Gordon Brown applauded leaders for acting together to stabilise banks and create the conditions necessary for a return to growth, but he warned there was no room for “economic complacency or over confidence”.
“To decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would in my judgement be a serious mistake.
On the contrary, with more than half of the $5 trillion fiscal expansion committed to, yet to be spent, I believe the prudent course is for G20 countries to deliver the fiscal plans and stimulus packages they have put in place and make sure they are implemented in full both this year and next.”
The Prime Minister proposed a series of principles during his speech, including a financial system based on responsibility, transparency and integrity; sound macroeconomic policies; open economies; environmentally sustainable production; and fair distribution of the benefits of growth.
Gordon Brown said G20 leaders in Pittsburgh needed to agree to an international plan for “durable” growth.
He said that would involve working to remove unsustainable imbalances between countries, and encouraging growth of international trade.
“The G20 needs to agree a clear and unambiguous mandate for the G20 to give priority to the resumption of global growth and to help countries achieve sustainable growth going forward. To address the governance gaps - that have been exposed by this first real crisis of the global economic era, we need - as we have agreed in principle - to implement far-reaching reform of both our international financial institutions and of our banks to bring them into the 21st century and make them more accountable, more representative and more effective.”
Earlier this week, the PM released a joint letter with the French and German leaders Nicolas Sarkozy and Angela Merkel, which called for binding rules for financial institutions that would ensure improved governance, greater transparency and changes to remuneration and bonuses.
Read more: UK, France and Germany release joint letter on G20
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